Never Let a Good Crisis Go to Waste

By: Tom Chatham

The government shutdown may be a good time for states to reestablish the authority they have slowly lost over the years. With the federal government in a dysfunctional stupor, the states have the opportunity to step up and take a leadership role that can undermine the federal authority in a number of areas where states should have complete authority. Not only can they regain their constitutional power but it may be a good time to take it one step further.

With all of the misinformation and shenanigans coming out of D.C. this may be the ideal time for states to look seriously at secession. When the federal government finally runs out of money, it will act like a dieing animal and strike out at anything that it can in a desperate act to keep alive. It will become despotic toward the people and the state
governments in an effort to stay in control.

When the federals cease to send out the checks that everyone depends on, the state and local governments will have to deal with the fallout of all of the unsustainable policies embraced at the federal level. For that reason it would benefit the state governments to ready a plan now for taking charge after the federals collapse.

– Establish a state bank in each state

– Convert all state money to gold and silver coinage

– Prepare to assume control of all federal property in the state

– Prepare to assume control of all federal programs the state wants to keep

– Prepare to declare all federal laws null and void

– Coordinate gold and silver valuations with other states

– Prepare national guard units for any federal pushback

– Insure critical infrastructure will continue to operate

The act of storing coinage now will give the state the ability to continue payments to individuals keeping commerce flowing. By stockpiling gold and silver now and doing a revaluation of goods to 1940 levels after a federal failure, the state should have sufficient funds for operations. That means that all prices will need to be revalued to 1940 levels including gold and silver. Someone making $1,000 a year will be making a living wage and gold and silver will be traded at their constitutionally set values. The undervalued PM prices at this time will enable state governments to leverage their funds and actually have more money in a revaluation allowing them to operate until the new economy stabilizes and tax revenues are reestablished at reasonable levels.

The best tax scheme at this juncture would be a sales tax to provide all revenues for the state. A large percentage would go to the county where collected and a smaller portion would go to the state for operations. The county would be responsible for all of its operating costs and government programs and would be limited to its tax receipts. All other taxes would be repealed. This is the most equitable way to finance government.

With state governments in control, the federal government could eventually be reestablished under state supervision and would only have authority over federal military units and ICE agents to insure a protected border and the authority to mint national coinage for circulation. The federal authority would only have funding through tariffs and customs duties as a source of operating revenue.

This idea is a long shot but is possible if sold to the American people in the proper manner. A great deal of education would have to occur to properly inform the populace but nothing is impossible. If the state governments preempt the federals before they declare an emergency, the states would be in a controlling position. It’s nice to dream but we should not let this crisis go to waste. Any power that can be wrestled from the federals at this time is worth the effort.

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Posted on October 4, 2013, in Preparedness and tagged , , . Bookmark the permalink. 4 Comments.

  1. “By stockpiling gold and silver now and doing a revaluation of goods to 1940 levels after a federal failure, the state should have sufficient funds for operations. ”

    Nope……that ship has already sailed ( mostly to China and India in the case of gold, and industrial uses in the case of silver ). There isn’t enough physical silver and gold around anymore to come close to doing this……

    • Current global stocks of silver are about 1 billion oz. Current annual silver production is about 700+ million oz. It would take 500 million oz. of silver and 4,000 tons of gold to initially recapitalize the U.S. to operate near 1940 levels. That’s just a start but would get the wheels moving. The gold should not be a problem. The silver would be tight but I think doable. The only alternative is more fiat currency. The manufacturing processes that use silver, solar panels and electronics mainly , would likely drop for months or years in the event of a U.S. default which would affect the whole world so that would free up sizeable supplies. I don’t think there are any perfect solutions but that is the best that I see.

  2. In 1940, the Treasury alone was sitting on over 3 billion ounces…..not counting what was in circulation in coin. That is all gone….sold into the market at the behest of the Silver Users Association.

    The largest single stockpile in the US today is in the Comex, and it’s around 30 million ounces.

    SO, again, I say, I don’t think it’s possible for the US to come up with enough….certainly nothing like 500 million.

    Gold: Not a problem IF…..IF……IF…..the gold is still in Ft. Knox. I’m one that believes it’s gone, and there is certainly no proof in the form of an audit to say otherwise.

    Germany wants about 300 tons back from the FED…..they’ve been told it will take 7 years for them to get it. That suggests the FED is way short of gold. SO, if the gold isn’t in Ft.Knox, and the FED hasn’t got much…..WHERE is 4,000 tons gonna come from ?

    The only way I can see a shot at your plan working is if things did NOT go back to 1940 pricing…..at least in terms of gold and silver…..not sure they could pack that genie back in the bottle anyway. It would have to do the opposite….gold and silver would have to go WAY up in terms of purchasing power. Gold at 5-10,000/oz and silver over a 100. ( in today’s ‘dollar’ )

    The copper penny might gain new popularity !

    • One thing about this scenario is that only the most conservative states would attempt it. The larger liberal states with most of the population would follow the federal government down the drain. That would leave about one fourth of the population doing this, but it is all academic at this point. It would take a massive shift in public sentiment before anything was done and I don’t really see that happening. It’s always good to explore possibilities though.

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